A decade ago, the ABLE Act (the Stephen Beck, Jr. Achieving a Better Life Experience Act) was signed into Federal Law, with Indiana’s ABLE Act going into effect a year later. ABLE allows individuals with disabilities to exercise more individual choice and control over their own expenses while still being allowed to benefit from Medicaid and Supplemental Security income. The acronym ABLE stands for Achieving a Better Life Experience.
At our Indiana estate planning law firm, we often work with the families of special needs individuals and assist them with options like special needs trusts and ABLE accounts.Unlike trusts, which are controlled by trustees, not by the special needs beneficiary, ABLE accounts restored choice and control to the disabled individuals themselves.
The basic rules surrounding INvestABLE accounts include:
- Investment earnings are not taxed.
- Withdrawals are not taxed if the money is used for qualified disability expenses.
- Along with the disabled individual him or herself, parents, other relatives, and friends may contribute to the account.
- The individual’s eligibility for SSI and Medicaid is unaffected (even if the value of the account exceeds the resource limits for means-tested government assistance)
During calendar year 2025 five significant updates were made to ABLE rules:
- The annual contribution limit has been raised to $19,000.
- Working account owners are allowed to contribute an additional amount of $15,650.
- The option to roll over funds from a 529 account has been made permanent.
- ABLE contributions are now eligible for the Savers’ Credit (tax credit for lower-income individuals)
- The eligibility age for starting an ABLE account expands in 2026 to 46 (previous age limit was 26).
– by Rebecca W. Geyer
